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HomeMy WebLinkAbout2003-05-13 EDA MinutesCITY OF COTTAGE GROVE ECONOMIC DEVELOPMENT AUTHORITY MINUTES May 73, 2003 Pursuant to due call and notice thereof, a regular meeting of the Economic Development Authority was held at City Hall, 7516 80th Street South, Cottage Grove, Minnesota on the 13th day of May 2003. CALL TO ORDER The meeting was called to order at 7:30 a.m. by EDA President Wolcott. RnLL CALL Members Present: Jim Wolcott, EDA President Sandy Shiely, EDA Vice - President Gerry Weingartner, Authority Member Glen Kleven, Authority Member Dick Pederson, Authority Member Mike Wennen, Authority Member Members Absent: Others Present: Ryan Schroeder, City Administrator Michelle Wolfe, Assistant City Administrator Steve Barrett, Management Analyst Scott Johnson, Management Analyst Colby Johnson, South Washington County Bulletin Dr. Bob Kretchmer Roger Jensen Alan Kretmer APPROVAL OF MINUTES Authority Member Sandy Shiely moved to approve the April 8, 2003 EDA Minutes. Dick Pederson seconded the motion and the Motion carried unanimously. Economic Development Authority - Minutes May 13, 2003 Page 2 PROJECT UPDATES The Schmid and Son groundbreaking took place on Thursday, May 1st. The groundbreaking was well attended by local officials and staff. The city has received three inquiries since the last meeting. One is a possible manufacturing project. The second project is from MEDP that chose Cottage Grove as a possible site. The third inquiry is for an office project. Staff also put together a mailer to projects that are currently on hold. The response to this mailer has given staff the opportunity to update the files on numerous projects. OAK PARK COMMONS This project has been approved by the EDA and City Council. Roger Jensen, the owner of the Oak Park Commons property, is requesting financial assistance for the utilities needed for this project. Mr. Jensen asserts that the property was zoned commercial by the city and the utilities should be ready for this type of use. The Oak Park Commons project is able to access utilities through the new Hardwood Court, but it is more expensive to do this than if they were accessible from 80 Street. He is asking for the EDA's assistance with the cost of utility connections. Also, he would like help with grading his site lower to help with the grade of Hardwood Court. To lower the parcels grade from two to three feet would cost between $10,000 to $20,000. Mr. Jensen was joined by Dr. Bob Kretchmer, who will be a future tenant in the space, and Alan Kretmer who is the architect on the project. Mr. Kretmer told the EDA that it would cost $60,000 to stub in the utilities at 80 St. It would cost approximately the same to hook up the utilities on Hardwood Court because they need to push the storm sewer water up the hill and place the pipe 23 feet deep. It makes sense to bring the grading down for this project to help with the cost of the utilities. Ryan Schroeder said that Mr. Jensen's main argument is that the utilities should have been stubbed in because the land was guided for commercial development. Mr. Schroeder pointed out to the EDA members that not every graded site in the Industrial Park has had enough utility stubs to accommodate each project as the city makes decisions ahead of projects on utility stubs. Mr. Kretmer explained to the EDA that the lower level of the project will be facing 80 St. The initial design of the project called for the storm water to go to 80 St., but 80th St. is not designed to accommodate the storm water ponding for this project. Mr. Kretmer said the project was forced to bring everything north to Hardwood Ct. The depth of the pipe exaggerates the cost of the project. Mr. Schroeder commented that the project cannot be reduced in grade lower than three feet because it will cause other problems for surrounding properties. Jim Wolcott asked what size the storm sewer pipe was off of 80 Street. Mr. Kretmer said the pipe is currently 12 inches and the site requires an 18 inch pipe. Mr. Wolcott asked if still more pipe needed upgrading near Grove Plaza. Mr. Schroeder said that some smaller pipe still exists at the Grove Plaza site. Mr. Wolcott Economic Development Authority - Minutes May 13, 2003 Page 3 stated that the grade change does make sense on this project, but he still needs to see the numbers on the other parts of the project. Mr. Schroeder informed the EDA that the city is paying $135,000 for the construction of Hardwood Court. Oak Park Commons is paying $60,600 for the utility connections and area charges. Mr. Schroeder also informed the EDA that the Walgreen's /Gateway Center had a utility expense of over $400,000 to make the site work. Mr. Kretmer told the EDA that the total cost for the utilities and grading will be about $134,000. Mr. Wolcott wanted to know who paid for the 80 St. improvements. Mr. Schroeder said the improvements were paid for out of the storm water area funds. Roger Jensen wanted to know why he was being assessed area charges. Mr. Schroeder said the charges help to pay for the trunk utility extensions. Mayor Shiely wanted to know how Hardwood Court is being financed. Mr. Schroeder said the $135,000 for the road is paid for out of the Gateway Fund. The road will help with future development opportunities. Mayor Shiely wanted to know if the opportunities would be as good for a commercial project without a new road. Ryan Schroeder thought this would create deficient space on the back side of the project and it would make the project less feasible. Mayor Shiely thought this was a city paid benefit to the new businesses. Mr. Schroeder said that the roadway will be paid for through gateway revenues generated by the Kohls project. Dr. Kretchmer thought that a subsidy would be warranted for his project because the Kohls project had forced his business to move. This move has created additional costs and hardships for his business. Mr. Kretmer stated that residential development is a net deficit for the city. The city is only able to gain money through commercial and industrial projects to pay for new residential projects. Mr. Schroeder clarified Mr. Kretmer's point by explaining that not all residential property is subsidized by commercial /industrial projects. Residential projects over a certain amount will generate tax revenues exceeding city operational expenses. The point is to have projects of significant value in Cottage Grove. Glen Kleven did not think the EDA should make a recommendation on this issue because it should be considered by the City Council. He was also unsure of what revenues were available to help with this project. Ryan Schroeder explained that it is an EDA project. Mr. Kleven thought it might make sense to adjust the area charges. Roger Jensen made the point that Kohls is subsidized and they had to move so Kohls would receive their site. Glen Kleven said that Mr. Jensen agreed to the final buy -out number. Mr. Jensen said he had no choice but to take the offer or face condemnation proceedings. Mr. Kleven asked Mr. Schroeder what options were available to the EDA. Mr. Jensen, Dr. Kretchmer, and Mr. Kretmer left the meeting at this time and were told that the EDA would respond to them. Mr. Wolcott was uncomfortable with the comments made by Mr. Jensen and his associates that the city did not do their job on 80 Street. He did not think it was right for taxpayers to subsidize their property because they did not do their homework to find out if the utilities were in place. Mr. Schroeder commented that Mr. Jensen could have researched this before buying the property. It is unfortunate that the utilities were not constructed to the benefit of this panel. Mayor Shiely commented that the construction of Hardwood Court will help their project. She also mentioned that she thought they Economic Development Authority - Minutes May 13, 2003 Page 4 were asking for $134,000 to subsidize the project. Jim Wolcott thought the EDA should not waive area charges because they have already paid for Hardwood Court. Mike Wennen thought it might be a possibility to waive the area charges on the project. Mr. Wolcott thought the developer paid a reasonable price for the property. If the project is not moving forward because of only $40,000 maybe the EDA should reconsider how important the project is for the city. He also thought waiving the area charges would be a bad precedent for the city. Glen Kleven also did not think it would be a good idea to subsidize this project. Gerry Weingartner made a motion to ask for Council's permission to split the cost of lowering the site. The EDA would pay 50% of the site lowering cost capped at $10,000 because of the enhancements to the roads. Mr. Schroeder clarified that that would become a cost increase to Hardwood Court that is funded by the EDA. Dick Pederson seconded the motion and the motion passed unanimously. HARKN ESS AVENUE The haulers who are removing the fill from the Kohls site will now use Harkness Avenue to haul their fill to Woodbury. They will continue to use 80 St. as their return route. The city will reconstruct Harkness Avenue at the end of the project. Gerry Weingartner made a motion to approve the road reconstruction of Harkness Avenue after the project is completed. Dick Pederson seconded the motion and the motion carried unanimously. OAKWOOD COMMERCIAL AGREEMENT Ryan Schroeder explained the changes that were made to the Oakwood Commercial agreement to the EDA. Some language on sign specifications and 360 degree architecture has been added to page 3. All the "mays and "shoulds" have become "shalls." The zoning ordinance for the city has also been added to the agreement. Mr. Wolcott thought nursery schools and day cares should not be included on the list. Plus, the EDA decided to not allow uses 13, 18 33 40 44 47 49 50 59 69 72 from the draft of zoning ordinances allowed uses in this agreement. Mr. Schroeder also asked the EDA members if a list of restaurants should be included with the agreement. The EDA decided not to include the list because it will limit what restaurants developers are looking for and the EDA may be unhappy with some of the choices on the list. Staff will bring the purchase agreement template on the next EDA meeting for final adoption prior to going to Council for approval. GROVE PLAZA Mr. Schroeder informed the EDA that Roundy's has made an offer to purchase Rainbow Foods. Grove Plaza still intends to renovate the small tenant space in the near future. They have two letters of intent and will hopefully have a few signed leases in the upcoming month. One of the anchor stores wants to wait so they can open up all three stores in Washington County at the same time. In addition, Gorve Plaza owners are planning to construct a 4,200 square foot small tenant space on the site adjacent to Hollywood Video. Economic Development Authority - Minutes May 13, 2003 Page 5 HIGHWAY 61 DRAINAGE Steve Barrett informed the EDA that the city has retained Roger Rohrer to appraise properties for stormwater retention. Options being considered are to obtain drainage easements or buy parcels in fee. Mayor Shiely wanted to know if the city would need to keep the billboards. Mr. Schroeder said the current owner is interested in keeping five faces on the billboards and the city would assume the remaining leases. Gerry Weingartner asked about the concrete that has been piling up near the site. Jim Wolcott said the concrete is from the pavement management program and will be removed this fall. GATEWAY NORTH REDEVELOPMENT Ryan Schroeder informed the EDA that the city did not need to go to condemnation for any of the parcels in the Gateway North Redevelopment area. There were 27 parcels packaged in total. The city will retain most of the businesses displaced during the Kohls store. Only two nonprofit organizations will not stay in Cottage Grove. The projections on county market values appear to be on course. There will also be a number of spin -off projects from the Kohls store. The Oakwood site owned by the city is estimated at $1.5 million for sales proceeds. The Kohls project appears to be on schedule. Mr. Wolcott wanted staff to make sure the store has an exit in the back. EDA GOLF OUTING PROMOTION Staff updated the EDA on the 2003 golf outing. Invitations will be sent out in the near future. Also, staff has put together a promotion for Chamber of Commerce members and people who sign up for anything higher than a silver sponsorship. They will receive the same benefits as the Industrial Park businesses from the EDA's current promotion. Glen Kleven made a motion to approve the promotion. Mike Wennen seconded the motion and the motion carried unanimously. Ryan Schroeder also mentioned that the River Oaks revenues are significantly higher compared to last year at this time. ENABLING RESOLUTION Michelle Wolfe updated the EDA on the changes to the enabling resolution. There is a quick window of opportunity to make the changes. The changes coincide with the EDA terms and reappointments. The changes need to be ready for public viewing when the public hearing notice is published. Glen Kleven wanted staff to clarify the language in Section 4. Jim Wolcott agreed that some clarification was needed. Michelle Wolfe will make the changes. Glen Kleven made a motion to ratify the proposed language in the EDA Enabling Resolution with the changes in language to section 4. Mike Wennen seconded the motion and the motion passed unanimously. Economic Development Authority - Minutes May 13, 2003 Page 6 CALENDAR May 17 Park Grove Pet Clinic ribbon cutting EAST RAVINE The East Ravine project will have a Technical Advisory committee. A member from the EDA has been invited to sit on the committee. It was decided that Dick Pederson will be the EDA representative with Mayor Shiely serving as back -up. ANNUAL REPORT Jim Wolcott liked the new format for the new EDA Annual Report. Glen Kleven thought a bulleted list or outline would be helpful in each section. Ryan Schroeder agreed that it would be a good idea to add a few bullet points in each section. EDA VACANCY Al Boche Jr. has expressed interest in the vacant seat on the EDA. Mr. Boche Jr. will give up his current seat on the Parks Commission. Mr. Boche installs computers in restaurants for a living. Glen Kleven made a motion to formally recommend Al Boche Jr. for the EDA vacancy. Dick Pederson seconded the motion and the motion carried unanimously. The recommendation will be considered at the May 21 City Council Meeting. BUSINESS SUBSIDIES A public hearing will take place at the next EDA meeting. A similiar hearing will take place at a future City Council meeting. Both will have hearings on the statutory changes for business subsidies, to establish revised criteria. RIVER OAKS LIQUOR SALES AT GGGT Ryan Schroeder informed the EDA that for River Oaks to sell beer at the Great Grove Get Together a motion needs to be made to request the Council's permission. Jim Wolcott asked if more food vendors would be present. Mayor Shiely informed the EDA that there are 9 vendors at this point. River Oaks is also proposing to sell hamburgers at the event. Mayor Shiely made a motion to ask the Council to permit River Oaks Golf Course to sell beer at the Great Grove Get Together. Dick Pederson seconded the motion and the motion carried unanimously. Economic Development Authority - Minutes May 13, 2003 Page 7 ADJOURN The EDA adjourned at 9:35 a.m. Respectfully submitted, Scott Johnson Management Analyst